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Puma (PBYI) Down 8% on Q3 Earnings Lag, Nerlynx Sales View Cut

Shares of Puma Biotechnology, Inc. PBYI were down 8.2% on Friday after the company announced weaker-than-expected earnings results for the third quarter of 2020 on Nov 5.

In fact, the stock has lost 11.1% so far this year compared with the industry’s decrease of 2.2%.


Puma Biotech reported a loss of 79 cents per share in the third quarter of 2020, significantly wider than the Zacks Consensus Estimate of a loss of 33 cents and also the year-ago quarter’s loss of 44 cents.

Total revenues consisted of net product sales of Nerlynx (neratinib), Puma Biotech's only marketed drug, and royalty revenues. In the third quarter, total revenues were $50.8 million comprising $49.3 million of product revenues from Nerlynx and $1.5 million of royalty revenues from licensing partners. Sales too missed the Zacks Consensus Estimate of $53 million. Moreover, the top line declined from the year-ago figure of $56 million on lower Nerlynx sales and no license revenues compared with the year-ago quarter.

Nerlynx is indicated for extended adjuvant treatment of HER2-positive early-stage breast cancer in patients, previously treated with Roche’s RHHBY Herceptin-based adjuvant therapy.

Sales of Nerlynx decreased 7.8% year over year due to business disruptions caused by the COVID-19 situation.

Total operating costs in the quarter were $62.9 million, down 11.1% year over year. Research and development expenses (including stock-based compensation expense) were $23.3 million in the quarter, down 22.3% from the year-ago period. Selling, general and administrative expenses (including stock-based compensation expense) declined 5.7% year over year to $29.6 million.

Outlook

On the third-quarter conference call, management stated that for 2020, it anticipates Nerlynx’s net sales in the range of $196-$198 million, lower than the earlier projection of $200-$210 million.

Meanwhile, Nerlynx’s net revenues are expected in the $49-$51 million band for the fourth quarter of 2020.

Pipeline & Other Updates

Several studies on Nerlynx targeting different types of breast cancer patient populations and in earlier-line settings are currently underway.

Last week, Puma Biotech announced data from a cohort of the phase II SUMMIT study, which is evaluating Nerlynx for metastatic non-small cell lung cancer (NSCLC) in patients with EGFR exon 18 mutations who were previously treated with an EGFR targeted tyrosine kinase inhibitor (TKI). Data from the study showed that of the 10 patients being investigated, six experienced a partial response including four patients with a confirmed partial response while eight having achieved the clinical benefit.

Notably, the open-label phase II SUMMIT basket study is evaluating Nerlynx for treating solid tumors in patients with activating EGFR, HER2 or HER4 mutated cancers. Additionally, the company plans to report data during the fourth quarter of 2020 from another cohort of the SUMMIT study, which is evaluating Nerlynx for hormone receptor positive breast cancer patients with HER2 mutations.

Meanwhile, Puma Biotech plans to release results from the phase II TBCRC-022 study on Nerlynx in combination with Roche’s Kadcyla in the first half of 2021 for patients with HER2 positive breast cancer involving brain metastases and having a history of being treated with Kadcyla. Additionally, the company intends to conduct a meeting with the FDA officials during the first half of 2021 to discuss the accelerated approval pathway for Nerlynx to address HER2 mutated hormone receptor positive breast cancer and NSCLC with EGFR exon 18 mutations.

Puma Biotechnology, Inc. Price, Consensus and EPS Surprise


Puma Biotechnology, Inc. price-consensus-eps-surprise-chart
| Puma Biotechnology, Inc. Quote

Zacks Rank & Stocks to Consider

Puma Biotech currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the biotech sector include Fulcrum Therapeutics, Inc. FULC and Halozyme Therapeutics, Inc. HALO, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fulcrum Therapeutics’ loss per share estimates have narrowed 1.1% for 2020 and 0.9% for 2021 over the past 60 days.

Halozyme’s earnings estimates have been revised 19.7% and 13.7% upward for 2020 and 2021 each over the past 60 days. The stock has rallied 112.6% year to date.

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